Car loan tips − refinance tips and techniques

One of the best kept secrets around for saving money is car loan refinance. However, most people never thought of car loan refinance as an effective way to earn extra cash. So how does a car loan refinance program exactly work? The idea is pretty simple. When you get a car loan refinance program, you pay off your current car loan with another car loan from a different lender that has a lower APR. So basically, refinance a car loan is the same as a home refinance.

Car loan refinance is good for you since refinancing auto loans can lessen your monthly car loan payments. Also, your interest rate drops, allowing you to pay off the balance of your car loan much faster. Today, many car owners are beginning to realize how you can save thousands through car loan refinance, too.

Car loan refinance has become a popular trend, especially with today’s dropping interest rates. It’s like stumbling upon a bankroll you didn’t know you had or finding cash in your clothes while doing laundry. With car loan refinance, you pay lesser monthly payments, allowing you to pay off your loan balance faster. Imagine how much you can save on interest alone if you could pay off your loan in say 12 years instead of 15. You can use the extra money you save to pay off credit card debt or accelerate your car loan payoff.

Car loan refinance can benefit even those with bad credit

Car buyers with bad credit can indeed obtain car loan refinance as a way for them to lower their APRs. But because some dealers dupe them into thinking that they have no choice but to stick with 21-25% APR, they don’t even think of trying.

Let’s say for instance that you borrowed $16,500 for 60 months on your new Honda Accord and let’s assume that you have a less than perfect credit rating or have had no previous credit. Your dealer got you approved at 21% APR for a 60-month car loan. So you start paying off your car loan for a few months but then you decide to get a car loan to refinance with another lender at 6% APR.

Your current monthly payment at 21% APR would be around $446 while your payment for the new car loan refinance at 6% APR would be about $319. The total interest on your current car loan would be around $10, 283 at 21% APR but you can save about $7,643 of that if you get a car loan to refinance with a total interest charge of only $2,639.

Car loan tips − every car buyer must know

If you want or need a new car, but you don’t have the capital upfront you can consider taking out a loan for the purchase of your vehicle. I’ve taken to many people who have always paid upfront or have kept their car until it falls apart because they either didn’t want to have to pay for something that would depreciate so fast or they thought they didn’t qualify to get a loan. There’s a good chance that paying the monthly rate might be cheaper than continually fixing up the old heap.

There are so many different financial companies that specialize in issuing loans specifically for the purchase of automobiles. Even more conveniently, they’re all pretty well setup online for easy access. This is a blessing in disguise, and fleeting are the days when you had to go to the nearest bank and get denied or take on a massive payment due to the lack of options. With online loans, you have the opportunity to shop around and be much more confident that you’re not getting “taken to the cleaners” on the first stop.

Often, this type of loan for the purchase of a car is known as an “unsecured car loan”, and you can search for specialist companies online that provide them. A good car loan company should be able to give you an instant free quote, and many of these companies will provide between 90% to 100% of the purchase value of the car.

Typically the car loan is repaid over three to eight years – five being the most popular. What’s particularly interesting is that even people with poor credit, bankruptcy, or CCJ (County Court Judgment) are eligible to take out an unsecured car loan. Now going into debt is never a good thing but if you need a car and have to go the loan route then always work within your means.

Understanding what your credit situation before starting your quest for a new car loan, is critical. You should seriously get your credit check done to ensure you know going in what issues you have if any. As stated earlier, an Equifax Credit Report will cost about $15 but is well worth it. You can also try FreeCreditReport.com, but either way, it’s a small price to pay to ensure you know where you stand, especially if you’re planning on going car and loan shopping in person.

As always, it’s good to visit as many car loan online websites as you can – many online websites will offer you a free quote for your car loan, and it’s a good idea to get as many of these as you can before making a final choice. Try to get at least three and even four quotes to compare and ensure you’re getting the best deal out there. Getting quotes usually only takes a few minutes to fill out a form but doesn’t cost a dime, so take advantage of them. The worst thing when buying anything on impulse sees it cheaper right after you’ve paid.